As Alberta enters a second year of recession, the question facing homeowners looking to put their house on the market is this : will I get a good price for my property? It should come as a relief to potential home sellers that home prices have stayed fairly steady despite the oil crisis. Latest statistics from the Realtors Association of Edmonton indicate that the Edmonton real estate market is quite insulated from the economic downturn, at least for now.
How is the sales momentum?
It shouldn't come as a surprise that sales performance was a bit drab compared to the same period last year. The total number of home sales were down 11% over April 2015. This fall was pretty much evenly spread across duplex, single-family and condominium sales.
Common wisdom tells us that we must buy more when things get cheaper, whether it's stocks or property. Conversely, it is best to postpone buying when property or stock prices rise. However, in reality, it plays out quite differently.
When real estate prices go up, people tend to buy in the fear that the prices may increase further in the near future. When prices fall, sellers tend not to sell and prefer to wait until prices go up once again. The issue with this strategy is that prices often take a long time to bounce back, creating the risk that home value will fall below the equity homeowners have in them.
Average sale prices of homes pick up slightly
It is impressive that home prices have held up – even if modestly – in the face of the weak economic climate.
The average single-family home price for April is $439,982, compared to $436,124 in the same period last year.
The average price for all types of dwellings was $377,283, an increase of approximately $1,000 over the previous year.
The condo market has also stabilized, with average sales at about $251,000.
However, sales of duplex and row houses fell to $339,225 last month; the average price last year was $356,158. Buyers looking for duplex homes can consider entering at current price points.
Home selling and buying activity – which usually picks up during spring – is largely expected to follow in the footsteps of last year. Whether you're a buyer or seller, now is a good time to explore your options with an Edmonton realtor.
Three Home Improvements that Add to Resale Value and Three That Don't
If you're wondering what kind of home renovations are worth the investment, and can actually increase the resale value of your house, consider these three before anything else:
1. A nice kitchen remodel
Here, 'nice' doesn't mean high-end or deluxe, but changes that enhance the utility/functionality of your kitchen while also ensuring that they are aesthetic and complement the rest of the interior décor. Elements to focus on include:
Fresh paint in contemporary or trendy colors. Ideally, you should be going for low-VOC paint, which makes your kitchen a safer and more environment-friendly space.
Energy-efficient appliances – such as the high-efficiency ones with ENERGY STAR® ratings – can save you as well as future homeowners money as they use less energy.
2. A deck
A deck is a good addition because it expands the living area at a very reasonable cost per square foot. It also allows you to enjoy the outdoors during springtime or pleasant weather. Even better if you can do some or all of the deck construction yourself.
3. Better insulation
One of the first steps homeowners are advised to take when they're ready to put their house on the market, is to add caulk or insulation in areas that require it. These include the basement, around windows and doors, around light switches and electrical sockets, the attic, and spaces where wires and ducts go outside your home.
Which renovations to avoid?
A swimming pool is a luxury addition that's a bit too expensive to recoup. Besides the high costs of an in-ground pool, you also need to factor in the significant maintenance costs. Potential home buyers – especially seniors or those with tiny tots – may not even see the appeal in swimming pools.
If you think wall-to-wall carpeting can enhance the visual quotient of your home, it certainly can. But don't be too sure of its ability to please all potential home buyers. Between the high costs of wall-to-wall carpeting and its well-document role in triggering allergic reactions, attracting buyer interest and/or recouping your investment can get challenging.
While an additional room can increase the value of your home to buyers, a family room or a games room isn't such a great idea. It may be especially unappealing to buyers who're concerned about the higher costs of heating and cooling one more room. You may also be tempted to hike up the asking price of your home by several thousand dollars because it has an extra room. However, home buyers – in general – will not pay $300,000 for a house in a neighborhood where the average home price is $200,000.